April 24, 2009

Cultivated areas of summer-sown crops in India such as oilseeds, rice, and cotton are likely to rise this year due to near-normal monsoon projections and better prices, but distribution of rainfall will be critical to final output, industry officials said Thursday (Apr 23).

 

Last year, irregular and uneven distribution of rain hit most summer-sown crops.

 

"The government's projection of 96 percent of normal seasonal rainfall is good for the oilseed crop, provided we have equal distribution of rains at regular intervals," said B.V. Mehta, executive director of India's Solvent Extractors' Association.

 

Oilseed production declined last year due to a dry spell in July and irregular rains during the year, despite near-normal monsoon conditions, he said.

 

Mehta said that good prices for soy, the main oilseed sown during the summer season, have boosted sentiment so farmers are likely to plant more of the crop.

 

Currently, soy are being quoted at Rs26,500 per 100 kg in the spot market, up from Rs19,250/100 kg in October during the harvesting of the crop.

 

India's annual monsoon rains are likely to provide around 96 percent of the long-term seasonal average, the India Meteorological Department said recently. Last year, the country received about 98 percent of the long-term seasonal average.

 

"The only comfort factor we have is that there is no extraneous force that is going to affect the monsoon this year like the El Nino," said Madan Sabnavis, chief economist with the National Commodity and Derivatives Exchange.

 

EL Nino is a phenomenon usually associated with below-average rainfall in India's agricultural areas.

 

Cotton cultivation is likely to rise, said Shirish Shah, a director with the Cotton Association of India.

 

"Farmers are likely to go for more cultivation of cotton this year because of a higher minimum support price," said Shah. "If rainfall is good the crop will be reasonably good. It should be at least the current year's level."

 

India's cotton production in the marketing year that started with the harvest in October 2008 was around 29 million bales of 170 kilogrammes each, according to the latest estimates of the Cotton Advisory Board.

 

Late last year, the federal government raised the minimum support price for cotton for the marketing year to September 2009 to Rs2,500-Rs3,000 per 100 kilogrammes, depending on the grade, from Rs1,800-Rs2,030/100 kg the previous year.

 

Vijay Setia, president of the All India Rice Exporters Association, said that if rains are evenly distributed, then 2009 rice output is likely to be around the same as last year's 98.9 million tonnes.

 

Summer crops such as soy, rice, cotton, and corn are sown in June and harvested in October, and are heavily dependent on the June-September monsoon rains.

                                    

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